Jérôme Gillet, branch manager at Alta Signa, provides an update on the French regional Financial Lines, Cyber and Professional Indemnity insurance market, where demand for capacity is creating both opportunities and competition in the European market.
We are a team dedicated to the European specialty market focusing on financial institutions, management liability, professional indemnity and cyber risk - and across all these classes, a complex interlinking of macro economic and industry dynamics have resulted in volatility and price increases for insurance buyers in France in recent years.
This volatility isn’t isolated to France of course, the European insurance market has reeled from the impacts of Brexit - which has affected UK carriers seeking access to the European market - as well as the pandemic, and the more recent implications of the war in Ukraine and associated sanctions and cyber risks.
A higher risk environment for corporations
Factor in too the unfolding landscape of high inflation and energy pricing impacting every sector of the economy, and it is clear that business leaders seeking to insure their companies are operating in a higher risk world now than just a few years ago. The insurance sector has reacted of course - tightening capacity and raising pricing in classes experiencing attritional losses, such as cyber.
Despite the many challenges, however, there are opportunities arising in the French insurance space, particularly in terms of cyber and professional indemnity (PI), which for more than 60 professions in France is compulsory.
In contrast to dynamics elsewhere, the regulated PI market is currently driven by low premiums and high competition, the regulated sector is experiencing some degree of stabilisation, unlike the non-regulated sector, which is seeing a stagnation of premiums.
Local expertise is critical
In order to effectively navigate the complexities that companies buying insurance face, it is important to have a presence on the ground in France. Local knowledge of regulation and risk landscape, as well as how to match this with insurer appetite is essential. Alta Signa’s panel of insurance capacity providers are a key advantage here - our long-standing experience and local market knowledge allows us to expertly build a sustainable local book of business with a focus on its long-term profitability. We stand out from other MGAs in the market with this unique capability.
Cyber market challenges
This access to reliable, highly rated capacity is proving vital for cyber – a sector which is in huge demand but where comprehensive, affordable coverage is scarce. With a greater reliance on IT infrastructure, more data, increasing demand and more claims, it is little surprise that premiums have increased significantly across France.
Insurers are also having to contend with changing guidance on indemnifying ransomware and increased scrutiny on risk mitigation, the likes of which have prompted many insurers to separate PI coverage from cyber, and vice versa to prevent the risk of spiralling claims.
For Alta Signa, when we supply cyber coverage, our underwriting is technical and our expectations in cyber maturity are high. In line with the increasing risks of ransomware, denial of services and business interruption, companies are now being asked to demonstrate their lines of cyber defence; from self-assessment and testing, to two-factor authentication, it’s all about mitigating risks – especially when undertaking an acquisition and onboarding the acquired company to the platform.
Our ability to provide capacity is allowing us to progress forward and encompass more lines of business, not just FI, D&O, and cyber, but PI too, an area which we want to encompass more of, especially with SMEs operating in non-industrial sectors, such as law, finance and accountancy. With a team harnessing more than 20 years’ experience, our market knowledge and recognition stands us in good stead to achieve this, especially as we are already well-known to our larger clients.
As we continue to navigate the market on a detailed case by case basis, matching quality risks with quality capacity, so too will we continue our focus on building partnerships with local brokers to give them access to our capacity, and to build on our reputation until we are recognised as a go-to provider for PI, FL and cyber in France.
If you are interested in working with us, please get in touch to find out more.